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Recently, a series of food poisoning incidents have occurred, affecting establishments from small chain restaurants like Baolin Tea Room to large publicly listed companies, including Wang Steak, Kura Sushi, and 8 Way Dumplings. Just as the restaurant industry was beginning to experience a significant recovery after the pandemic, these food safety incidents threaten to halt that progress and incur additional costs for operators. Preventing food safety crises and mitigating the associated operational risks has become an urgent concern for the industry. Let's discuss how restaurant operators can address these challenges.
Although the food service industry is regulated by the Food Safety and Sanitation Act (hereinafter referred to as the "Food Safety Act"), a thorough examination of the Act reveals that only Article 12 mentions that certain categories and scales of food businesses, as announced by the central competent authority, must employ a specified ratio of professionals with technical licenses in food, nutrition, and catering. However, there are no specific regulations related to the operation of food service businesses. Many operators, therefore, open and run their establishments without any understanding of the regulatory framework. Often, it is only when health authorities conduct inspections or when a food safety crisis occurs that they realize their operations have been fraught with risks. Today, we will take some time to clarify which regulations food service operators must adhere to.
The first regulation that food service operators need to be familiar with is the "Good Hygiene Practice Guidelines for Food." This guideline was established pursuant to Article 8 of the Food Safety Act and is not included in the main body of the Act. Chapter 6 of the guidelines contains seven provisions specifically regulating the operations of food service businesses. These provisions outline how the front and back of house should be managed and operated. They are essentially the fundamental laws for the operation of food service establishments. By adhering to these regulations, conducting regular staff training and operational audits, and following all prescribed practices, operators can minimize their operational risks and even eliminate them entirely.
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Operational Risks of Violating the "Good Hygiene Practices for Food" Regulations
Let’s take a closer look at the potential operational risks that food service operators might face if they fail to comply with the "Good Hygiene Practices for Food" regulations:
1. Penalties from Health Authorities:
If food service operators do not adhere to the operational guidelines outlined in the "Good Hygiene Practices for Food" regulations and are caught during inspections, they could face fines ranging from NT$60,000 to NT$200 million. In severe cases, they might be required to cease operations temporarily, suspend business for a certain period, or even have their company or business registration and food business licenses revoked.
2. Consumer Compensation:
This is a scenario that every operator dreads. If a consumer complains about finding foreign objects in their food or experiences discomfort after eating, how much compensation should the operator provide to be deemed sufficient?
Firstly, according to the Civil Code regarding damage compensation, any expenses and losses incurred by the consumer due to the defect in the food, including medical expenses, transportation costs, nursing care expenses, lost wages due to inability to work, and mental distress from enduring discomfort, can all be claimed for compensation if it can be proven that the defect in the food caused these damages.
Secondly, under Article 51 of the Consumer Protection Act, consumers can demand punitive damages amounting to one to five times the total of all the aforementioned damages.
3. Reputational Damage (Sales Decline):
In this era of media explosion, everyone is a first-hand news broadcaster. If an operator has a single food safety incident that gets publicized, it can lead to significant reputational damage. Whether it’s a well-known international sushi chain being exposed for having live slugs in their flower sushi by a customer, or a reputable Taiwanese chain restaurant experiencing consecutive cases of food poisoning among customers and staff at its new brand outlets, the impact can be severe. Even if health inspections later find no foreign objects in the sushi restaurant, public suspicion can harm business. The restaurant group, for instance, suffered a significant stock price drop and substantial financial losses.
By maintaining compliance with hygiene standards and proactively addressing potential risks, food service operators can protect themselves from these severe operational consequences.
The restaurant industry, compared to other sectors, has a relatively low entry barrier. However, managing a restaurant's back-end operations—from kitchen equipment and ingredient management to cooking procedures—requires a high level of control. Any slight mistake can create an operational risk. Preventing these risks isn't difficult; it simply requires "strict adherence to Standard Operating Procedures (SOPs)."
We've already introduced the fundamental rule for restaurant operations, the "Good Hygiene Practices for Food Regulation." As long as operators set their in-house SOPs according to these guidelines, conduct thorough employee training, and perform regular audits to ensure SOPs are strictly followed, they can effectively prevent food safety issues by meticulously inspecting every step.
Food safety is the core of the restaurant industry, the foundation of brand value, and the cornerstone of reputation. Only by avoiding the operational risks brought by food safety incidents can businesses earn long-term consumer trust, ensure brand sustainability, and achieve true profitability for operators.
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